Open AccessThe Impact of GST on Indian Economy
Author(s) -
Rohan Navandhar
Publication year - 2021
Publication title -
international journal for research in applied science and engineering technology
Language(s) - English
Resource type - Journals
ISSN - 2321-9653
DOI - 10.22214/ijraset.2021.38754
Subject(s) - value added tax , ad valorem tax , indirect tax , tax reform , excise , goods and services , tax credit , business , direct tax , revenue , sales tax , service (business) , economics , public economics , commerce , economic policy , finance , market economy , economy , macroeconomics
In India, the idea of GST was contemplated in 2004 by the Task Force on implementation of the Fiscal Responsibility and Budget Management Act, 2003, named Kelkar Committee. The Kelkar Committee was convinced that a dual GST system shall be able to tax almost all the goods and services and the Indian economy shall be able to have wider market of tax base, improve revenue collection through levying and collection of indirect tax and more pragmatic approach of efficient resource allocation. Under the Goods and Service Tax , every person is be liable to pay tax on output and shall be entitled to enjoy credit on input tax paid and tax shall be only on the amount of value added. GST is a single national uniform tax levied across India on all goods and services. In GST, all Indirect taxes such as excise duty, central sales tax (CST)and value- added tax (VAT) etc. will be subsumed under a single regime. Introduction of The Goods and Services Tax (GST) expected as a significant step towards a comprehensive indirect tax reform in the country, which would lead India for its economic growth. The Proposed study is designed to know the impact on GST on Indian Economy with the Help of Its individual effect on different sectors. Under GST, goods and services fall under five tax categories: 0 per cent, 5 per cent, 12 per cent, 18 per cent and 28 per cent. For corporates, the elimination of multiple taxes will improve the ease of doing business. And for consumers, the biggest advantage would be in terms of a reduction in the overall tax burden on goods. "Inflation will come down, tax avoidance will be difficult, India's GDP will be benefitted and extra resources will be used for welfare of poor and weaker section. The Lok Sabha has finally Passed the Goods and Services Tax Bill and it is expected to have a significant impact on every industry and every consumer. Apart from filling the loopholes of the current system, it is also aimed at boosting the Indian economy. Keywords: GST, Indian Economy, Positive Impact , Negative Impact, Central Government, State Government